The November resale data was released today, and again this month we’re seeing some interesting movements on the price front. After a rather big drop last month, the single-family-homes rebounded a bit, and that the held the residential average… but condo’s continued to drop, hard.
Condo’s were down another 2.5% in November, and this after a they dropped 3.2% the month before. As we’ve discussed here ad nauseam, condo’s are by the far weakest sector because how severely overbuilt they are (in regards to supply)… but even so, an almost 6% drop in two months is massive, especially when the rest of the market is more-or-less holding. Thus don’t be too surprised if there is a bounce in condo prices in the near future.
Unless SFH’s suddenly start falling quickly too, I’d expect condos to at least hold if not rebound a bit in the short term. In the long term I still expect condo prices to fall WAY below where they are today, I just find this recent decoupling odd, and likely an aberration given the current interest rate environment. But who knows, Edmonton has thus far been the forerunner of the Alberta (and now, national) boom-bust cycle, so maybe it’s the beginning of the next chapter.
Sales are starting to slow and inventories dropping, as typically happens this time of year. They both typically bottom out in December (we see mass delistings the last week of December), then being to ramp up as winter progresses.
Which brings us to absorption rate, which jumped about half a point to 4.14 in November. As we can see from the graph we’re in more of a normal range for this time of year, but I would be wary as we’re coming off another extended period of high sales.
In times like that, people tend to hold off from listing for whatever reason (and record low interest rates certainly wouldn’t be rushing them either). Then when the market turns they rush them to market and you end up with a flood of inventory, as we witnessed just two years ago. The double whammy of a cooling market and rising interest rates could very well lead to another explosion of listings, so be aware.
Finally, and as always, here are the hard numbers:
Sales = 1,261
Since two years ago = +3.1% (+38)
Since one year ago = +41.5% (+370)
Since last month = -17.9% (-274)
Active Listings = 5,226
Since two years ago = -39.7% (-3,441)
Since one year ago = -34.8% (-2,789)
Since last month = -5.5% (-304)
Single Family Homes Median= $350,000
Since peak (May ’07) = -12.5% (-$50,000)
Since one year ago = +3.9% (+$13,000)
Since six months ago = +2.2% (+$7,500)
Since last month = +1.2% (+$4,000)
Residential Average = $318,482
Since peak (July ’07) = -10.2% (-$36,236)
Since one year ago = -0.0% (-106)
Since six months ago = -2.4% (-$7,850)
Since last month = -0.2% (-$487)
Single Family Homes Average = $368,018
Since peak (May ’07) = -13.6% (-$58,010)
Since one year ago = +1.5% (+$5,261)
Since six months ago = +0.1% (+$346)
Since last month = +1.2% (-$4,324)
Condo Average = $231,684
Since peak (July ’07) = -14.8% (-$40,224)
Since one year ago = +0.1% (+$153)
Since six months ago = -5.3% (-$13,050)
Since last month = -2.5% (-$5,917)
